Iowa Resurrects Allied Suits
Tuesday, September 11th, 2001 Liability Litigation SubrogationControversy that once swirled around the management of Allied Mutual Insurance Company may seem like a distant memory that all but faded soon after Nationwide Mutual Insurance Company finalized a deal to buy Allied Group in 1998. However, the Supreme Court of Iowa has given Allied Mutual policyholders new life in a battle to recoup $1 billion in assets they say belongs to them. On May 31, the Iowa Supreme Court reversed a lower court ruling that had dismissed five derivative claims and three class-action claims that were part of a suit originally filed as a derivative suit in December 1997 by a policyholder, Mary Rieff. The suit against individual directors and officers of Allied Mutual and Allied Group was amended as a class action in June 1998, centering on an allegation that a "de facto demutualization" had occurred through a series of restructuring transactions that took place from 1985 to 1993.
